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tv   Cavuto  FOX Business  January 5, 2013 6:00pm-7:00pm EST

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name bak? warren buffett might want to channel ringo donovan. it doesn't take long for a super start to turn into a supernode all. or to go from a champ to chump. let's just say that the charges deck long after they have been dropped. neil: welcome, everybody, i am neil cavuto. i generally have a rule. it is a sacred law. this one i try to stick to. if you are a news show or paper and you have a ceo or olitician , the least you can do is equally chump of the news when the so-called coast is clear. this happened to corner a
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transformer former warren buffett advisor david sokol. he was a berkshire hathaway executive. quick to condemn, slow to acquit. so does that ring a bell? welcome it should. remember ray dovan who said after being cleared of more than a dozen charges, ranging from large nature fraud -- which office do i go to to get my reputation back? welcome he never could and he never did. he remained a business prior for wrongdoing he was gone never to have committed a single one. they say they need to unload.
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back to my caboodle law. showca the exoneration, just as he did th initial combination. it's only fair, and it's only right. who better to ask on this matter than the woman who covered the issue better than anyone i know. our own inevitable liz claman. greato have you. take us back to this. what happened? >> in 2010 in december, david sokol was constantly named as the guy who would take over berkshire hathaway when warren buffett could not. people loved him and looked at him like a son. warren buffett loved him and thought he was like a son. he asked him if you ever see companies that you really like and you put money into anything they are smart, tony.
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so david sokol saw a chemical company out of cleveland. it doesn't sound but it ended up with a lot of cash, which warren buffett love. david sokol was sort of flag by bakers flagged by bakers of citigroup. cigroup team up with the idea. and they told them he bought some stock. then he tells warren buffett in early 2011 that you might want to look at this company. neil: never telling him that he owned shares? >> he did tell him, but he didn't say that he bought it recently. warren buffett said i thought he had owned it for a long time. it doesn't look good when you buy something in a couple of weeks later the company gets bought by the guy. >> there could be a variety of reasons, but they drop going further on this. why that? >> they have not commented
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officially, but there are a number of reasons. maybe they felt they couldn't prove nything. but they interviewed a lot of people. i've spoken to people who they interviewed and david sokol ÷poke to fox business and i spoke to him and he said, go back to my childhood and take whatever you want. they basically couldn't charge him to move forward with a formal investigati. they did look into it more than a year and half now. but the fact is that they dropped it and he is telling fox business, i said, well, what about this because it's not over yet? and he said it's odd where you geget that phone call where they say you didn't do what you kno you can do. he also said he is thrilled that the sec made the conclusion that they did. they got so many documents and they walked awa >> he was urging those go back however far they wanted? >> as far as the trial. go back to any document you
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want. neil: [inaudible] >> he is now in his own family business. it is called teton capital. of course he c cares about his reputation. but when it comes warren buffett who get a categorically told us a year and a half ago that he was misled by david sokol, he feels that he was misled, -- he wasn't upfront about it. i did have an opportunity back then to ask warren buffett and his vice chair what you think out what happened here? what really happened in your mind? here is what charlie munger had to say. >> knowing david sokol and all that hapned, how people are talking so much about how it is a ding to the reputation of
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berkshire hathaway, how did do you see a? >> i saw instantly as tragedy. a super talented person. the world heard them, a very old thought. a tragedy we have seen since the days of the greeks. >> they absolutely felt that they were misled. i did try to speak with warren buett today and he told me, you know, i don't have a comment on david sokol. that is his feeling today. back then i checked and the sec had not called him and spoken to him. but i know that they did speak to a lot o people. >> you know these principles better than i do. but i must tell you that it doesn't pass the smell test for a guy that is worth so much money to make 3 million like that. why would he do it?
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>> well, and asked if he felt that he did anything wrong buying this stock and he said the only thing i did wrong was not resigning two years earlier when i tried to and warren buffett talked me out of it. he said that he wanted to leave to start his own family company. he said he had a personal life and he years and years ago lost his son. he ran mid-american energy, did a beautiful job, who told me this was one of his best managers. it broke his heart that someone woulbuy stock and then whisper in his ear. another thing that he had said that during the time, that he misled us about who came up with the idea. it was really bakers and not david sokol. either way, he was cleared and there you are the one so you see this and respected newspapers. the leadinbroadcast with good
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folks, following what liz claman is doing in the media. will lead tomorrow? i will give you an early hint. >> look at page 26. if you're lucky. anyway, liz, thank you so much. meanwhile, back your money. did you take a peek at your paycheck this wek? it's a little smaller, is not? the payroll tax credit is gone. the new tax rate is on. more than 80% of working americans waking up to the sober reality this week and john sununu says there is no relief for this hangar where anytime soon. governor, several people said at is going on. i'm not a fat cat, i'm seeing higher taxes. you know, it's happening in a lot of places across the country, isn't it? >> yes, my comments to you on david sokol. it is true.
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this evil visibility to after the fact. when you crucified him in public, would it kill you at the boom of page 261 he is exonerated. that's right, he's a bright guy and as he had always been, he was anonest guy. so it's good to hear. >> you asked the question about people getting hit with taxes. they get used to it. they will be getting hit with more and more taxes over the next four years. certainly over the next six months as well. obamacare taxes are coming into play. the middle class discovered that on a 1.7up to 2% tax increase out of this tax package. certainly the higher incoe people got even more than now. the older we are discovering that there is a 3.8% surcharge on investment income that most of the elderly people are
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counting on and continuing to live off of. taxes are here. they are going to have to grow whether people like it or not. this administration is going to put pressure across the board to increase incomether than to cut spending. >> so you're talking about the medicare surtax. one of the many taxhikes. i would love to get your general sense of why republicans on the budget deals pulled above all of these issues? you know, we didn't get any in return. no spending cuts. >> but they got squeezed in a political bias. squeeze in an eltion that the president was able to convince america that all he was going to do is increase taxes on the wealthy. he was claiming his views on taxes on the wealthy.
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the fact of the republicans started the night was a real problem. frankly they lost their leverage position and really lost the capacity to cut spending. >> i always thought that it should have come out and taxes on the rich are done. we will agree to it. but we have it on record that we have agreed to bring the tax rates back up to what they were. it was a bad idea, but then they would've said we are on record and you better be on record. th didn't. >> i would've combined that with is talking about cting spending. i would've said, we will cut everyone else's rates like you want to. then we will endorse simpson-bowles. if they had used that as a starting point, the president would not have been caught in the squeeze. whether we like it or not,
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whether simpson-bowles is good or not doesn't make a difference anymore. it's been anointed by the media and others in washington as being the responsible solution. the president, i don't think would've we've ever have bought simpson-bowles. that would've given us a good starting point for negotiations. >> well, you know, maybe it would have been a smart strategy. governor, it's always good having you. >> happy new year. hope you had a good chrstmas. neil: governor john sununu. i hope you did as well. business guys on why these tax hikes have t go. were jobs will go. because jobsill be drinking faster then. ron paul in his first interview since leaving congress. let's just say that he's not going out quietly. to when the government gets involved, we cannot provide a sense of personal
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>> the financial political crisis as a consequence of excessive debt. going from the middle class to the rich. no good has ever come from the power of the state to arbitrarily mold human behavior. such power when left unchecked becomes the seed of tyranny. >> don't look now, but paul the apostle has wandered intthe desert. not that the vocal one, but the political one. presidential candidate single-handedly galvanized the nation think that libertarianism is not a creepy science. money in an money out. a lot more money going out than
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coming in. the combition before anyone read and i have covered everyone. ron paul homeowning disastrous consequences. yes, even before that guy, ross perot. he joins me now for his first interview is a former congressman. welcome comments very good to have you. >> must with you again. at the risk of sounding disingenuous, i think you are among the smartest and sharpest public officials that i have had the honor of speaking to. i know that that might not sound like a compliment, but it is. i wonder with a voice like yours, who watches all the money going out of washington? umax i thinkhere will be many. and if it did any good at all, there should be ite a few. >> i have a hard time seeing them for the budget deal.
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>> we used to say that we have 100 spontaneous phone calls and there were about 2000 people who were really thinking about it. so there are a couple that are frustrated with the system. i tried to be the optimist. but sometimes that optimism in washington, as you have pointed out, is there is some encouragement from college campuses and therefore i'm not a pessimist because i thinkhey are willing to listen. they are idealistic and they know what they are inheriting. so therefore i think we can pull out of this, but not with what the politicians are talking about in washington. changing people's opinio. and i think to some degree, i've had a little bit of success i think you have.
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covering this last presidential race, the respected peoples intelligence. the proof was during the process of the caucus. your comments on eacelection night were electrifying. only you could get standing cheers from college kids. you are were talking about money supply and the federal reserve. and i have been trying my entire crew to do tht. so hope springs eternal that sticks and gets people galvanized. but look at these polls were people say leave the spending alone, leave my medicare alone, social security alone. we've defense alone and just tax the rich. and i'm ginning to wonder whether we have gonerom a country where the big government was over to the government is
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backed. >> no, i think the attack on the rich, and people have pointed out frequently, if you tax the rich and took all their money, and only finances government for a short periods of time. in my speech i made this point to so many that i advocate taxing the rich. sort of visit and be given by the people who are successful. not really helping the people. it doesn't help the people that they take the money from. i mean, does it create a more vibrant economy? is increase economic activity? now. but too often ople are driven by envy. and i just can't stand the success of people making money, but that's what happens in a free market. the free market itself is what is being sacrificed here, is in
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a? >> i think so. i have been arguing that for a long time. getting really criticized by someone who is criticizing capitalism and and how terrible it wa. but we don't have capitalism. we have fixed interest rates and over planning and spending. that's not what happens in a free market. the free market is designed differently. we just had l these extremists believing capitalism and that's why we have this mess. they are wrong and i'm trying to change people's minds this issue. >> i want to thank you. last time you are were here, have you are telling me that when you leave washington, you shld have him be your coworker. and i said i don't believe in any telling her that would make me look bad. [applause] >> have you back someday. neil: i will. thank you.
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he is way ahead of his time. all right, we are broke and the jobs market is a stub. the labor department is spending big bucks to create jobs not here and everywhere but
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neil: thisll falls in with this week. the labor department is getting mitchell dinero, peru, one of ten countries getting cast for jobs programs. i kid you not. in the final weeks of last year the folks at labour working to rush out 39 million among the beneficiaries, tanzania, brazil and indonesia, and, of course, burkina faso.
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it's all about spending, and we keep spending. but why these guys? >> so, the government has a big role in creating jobs. they have been so successful, exports that elsewhere. whether the government should be involved in job creation, but no one can argue that should be sent overseas. it's ridiculous. a very small amount of money relative to the udget. neil: all te democrats campaigned saying these evil corporate parents, the romney supporters, romney himself capitalizing on sending jobs abroad. and they're doing it with tax dollars. our tax dollars. >> exactly, and it's one of the reasons why there is some irony in this. the same people argue that companies that put their headquarters outside the united states are ripping off the taxpayer. that's because our tax rates are so i. among other reasons as spend
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so much money and wasted on prrams like sending these jobs elsewhere. this is to protect child labor, help unions. it's just ridiculous. neil: what i've long admired by you and your group and what you have done as president of citizens the, you put a magnifying glass on this. my only advice to you my friend is get a bigger magnifying glass because now it'out of control. out of control. >> absolutely. looking just at job training programs, 47 of them in e federal government. we spend 18 billion per year, and only five of them have an impact study which means that if someone gets a job and is enrolled in that program no one has any idea why that person got that job. less than half, the performance review. the unemployment for disabled people, that kind of help is also duplicative. even when the government wants to elp people, they fall over themselves creating new programs to solve the problem, and that's the underlying issue.
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neil: amazing. i think you for what you do and what your group does. you have done it with republican and democratic administrations, a bipartisan renter, and i deeply admire that. thank you. >> thank you. neil: more than 35 tons is what we need. anyway, wondering why moody's wants to shut down our debt rating? as these guys. >> the cost of medicaid is not the solution. >> what we should not be doing right now is to be flashed -- slashing the benefits of social security. >> rihanna budget and medicare. >> we must protect the health and social safety net. many of my patients still clean their dentures with toothpaste. but they have to use special care in keeping the denture clean. dentures are ve different to real teeth. they're about 10 times softer and may have surface pores where bacteria can multiply.
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full-time mode. here's all you need to know that the hundred and 13 time is not the charm. the new congress already pulling the single games. more democrats back on there don't touch my john tirade. leave entitlements alone, medicare, medicaid, social security. leaves 70 percent of what we spend a loan. leave it off the tabe. are they off the african rockers? still staring in the financial abyss. torpedoing and these guys don't budge. never mind they got their way on a cliff deal that raised taxes 41 times more than a cut spending. these guys figure they don't have to cut. no wonder moody's is signaling its going to lack are aaa rating. i'm shocked they have not done so already. what is going on? >> you know, it's amazing to me that tey are actually still in power and can get reelected. the reality is that they are a mutually beneficial society within themselves.
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neither of them want to either cut spending more cut entitlements because their own society, their own beneficial, you know, congress. the reality is going to be that we're going to have to raise the debt ceiling. it's going to cost us more money. we're going to go into debt more , and that's going to cause a ripple effect internationally in globally. decrease our dt rating, maybe double-a-2 and a. neil: side of the keys as will blink. the last downgrade the world went merrily on. what will it take? >> that such a good point. not only go merrily on, but the dollar actually got stronger after the downgrade because it created a lot of uncertainty. you know what, there's a point at which everything changes.
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all of a sudden people realized, these guys reallycannot get their act together. neil: a handle on your head. >> i know that. sometimes it takes that. you know, my guess is you're going to get a downgrade. i don't see how these guys get together. neil: my guess is it has no effect. >> i bet you a nickel it does have an effect. the dollar, this one doesn't have an efect, the next one, and i think this country needs a crisis. i think t crisis will be the dollar becomes trash and inflation heads up in a dramatic way. and that will get everyone's attention. are not going to come together in my opinion unless we have inflation and inflation big time. that will happen -- neil: people have short memories . i wonder whether people remember inflationary time and how painful that is because we cannot keep dodging the reaper.
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>> and that's the point. i agree. i think that we really need to of fall down on skinner knees and really feel the pain because nobody is paying attention. until they feel that pain which is inflation that nobody knows because it was 30-35 years ago, no one's going to pay attention. he's absolutely right and i agree with them. neil: the market's doing what they're doing. guys like yu who know what the score in the skinny is. it is going day today. >> no one wants to look good what is happening, and no one wants to be the guy to get the social security because their mom to father on social security. the reality is we have a declining birthrate in this country. we have been inclined elderly rate. regard to find ourselves is what the japanese weather is more adults in diapers then there are . who's going to find that? that's the problem.
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neil: play this out. >> in the stock market, i think it has a very good chance of being down this year. it's because in not going to make a profit growth. i think you will have more inflation. once the dollar becomes more drastic and once it becomes -- neil: you said that the time is close. >> the time is close. the reason the markets have not reacted yet, you nailed it. the last time this happened nothing happened. there will be a time, i'm betting you a nickel. if they lose this nickel bet, the next bed is a quarter because there will be a time when there is absolutely happens we get downgraded. the dollar goes to, you know, through the floor and inflation through the roof. as the crisis we need, and that is almost inevitable in my mind. neil: i'm not happy. want to thank you both.
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in the meantime, you're going to need a doctor. trying to organize more nurses when they strike. you're stuck. and i'm saying stick to. really.
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neil: all right. well, i think i'm bleeding year. well, you can buzz saw you want. she in coming. ch'in even there. she's on strike. the largest nurses' union just hooked up with the big health care union. let's just say, if my next guest , tea partier extraordinaire and post extraordinary is right this is going to make you sick. if you're in a hospital right now depending on a nurse who will be joining this union, you're going to be dead. not that bad, but it could be. >> can you imagine what happens if they did go onstrike and
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could not find any laws preventing ts and you get the b team, you really bargain-basement your health care? this is about power, aout they go on srike. and disappointed. his what happens. they team up because they're losing members. now they form a bigger union. they fight each other out for the piece of the pie. they go out and cause the company's more money. use the other makers as the example. labor cost. the labor costs for gm and for all these union rich or union film companies go up, pass it on in the cars in the service and everything they do. what happens for kaiser in all these other companies, well, they have to pass on the cost. is not just thestates where the union exist, they pass it on across the. they have to pass the cost on. health care cost already going up, go up even mor.
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neil: this is beyond just the co bank. it wwuld be like doctors going on trike. >> the biggest expenses your health. so then i began to wonder, could they really legally do that? in the middle of the intensive care unit, sorry, we have to up and wa. >> more likely there wl be smart about it and let the threat game. you have seen this play out. were going to do this. if you don't give us a deal. think about do they have in this. nurses' aide lab techs, support staff, food service workers. but whether they doing? using this as power. it's a threat, and that is big when people, when you're sick, you don't want to be worried about someone. neil: wod this be in area, you remember when ronald reagan, you go on strike, considered a light, crucial profession. in industry you can't go on strike.
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not out of this president. not at of this. this union-friendly president will, by the way, the labor unions, businesses unions, they will go as a group to the president. the nlrb and say, you have are back and we want our car routes. taxpayer dollars will likely be applied to these unions altamont neil: let me ask you this. watching the sigma right now and you and i end up in a hospital, stick a needle and our eyes regardless. >> sadly there's a problem because most people either do the right thing. they become victims of the unions that incorporate them. not all of them. there want to take care of people. they want to help. my nurse practitioners, whatever else. really mostly good people. the union is the problem. collective bargaining, the po the ability. neil: the union bosses.
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all rght. so much else. very smart guy. well, joe biden somebody in north dakota. they think it's a fritz. neil: are be away from the presidency. small business guys, they are talking about getting shaken down. [ lisa ] my name's lisa, and chantix helped me quit. i honestly loved smoking, and i honestly didn't think i would ever quit. [ male announcer ] along with support, chantix is proven to help people quit smoking. it reduces the urge to smoke. it put me at ease that you could smoke on the first wk. [ male announcesome people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. if you notice any of these stop taking chantix and call your doctor right away. tell your doctor about any history of depression or other mental health problems, which could get worse while taking chantix.
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neil: well, off the cliff. and to hear my small business buddies tell it, maybe into the abyss. you remember. ourselves of the earth real business, real folks to know the real score better than anyone i
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know, certainly better than i know. i love having them on to monitor things in this economy and to ke things real in this country cause rather than the politicians making the rules and the laws, if you think about it, these are the guys to have to deal with the consequences of those rules and laws, and it's a brand new year with lots a brand new rules and laws in teas. let's just say the small busine folks have some very big, big worries. i do that because you will always be in plce and in my memory does the a woman who argues with no less than the president of the united states risking the wrath of these very severe looking secret service agents toting machine guns. that's a true story. i did so again at the risk of embarrassing you agan. less talk about stuff that is worrying you again. all common to a big, big storm right now. what worries you? >> well, as a business owner i need certainty. a couple of things uncertain about.
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on certain my taxes are going up which gives me less money to invest in my business. i'm pretty sure that congress is not going to address the runaway spending that we have in this country. i'm really certain that there not going to do anything about tenement's pending, and i'm very certain that nobody knows what's going to happen with health care costs in 2014. so as a business owner i am really scared. i'm going to spend more money and i know what will happen the spending. the thing unconcerned about, they extended the unemployment for another year which means that they have an unfunded mandate that's going to the states. they can't print money for that. are going to be in worse shape than we are. north carolina, we hope 3 billion to the federal government for unemployment. neil: and employers can. i have to pay $84 year or
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every employee at half until we pay that off. no one is talking about that. >> i have a problem with my employees. i feel bad for myself. my employees. neil: you're in the catering. >> many employees before we ended up payroll. and there wa a line out the door for people asking why tis 13 and $15 shorten their paycheck. the average person maki $700 a week since lost $14 a week and other check. that's money taken off the street. spend more. disposable earnings. the taxes, no expensive. the pressure. neil: at least the unknown. least you know how much taxes are going up. you don't have that as a big unknown.
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>> it's a big unknown. neil: more surprises. >> if you have to worry about the health care. how much can everybody sustain? the country just got screwed. neillet me ask you. you have been raising -- you were a baker. and commodities, inflation is the worry for you. well everyone said last year there is no inflation, you would always remind, beg to differ. now those costs are probably going to be a lot more noticeable. what do you do? >> well, i don't know. what do you do? at is the scary part. that is the unknown. what i do know, a customer h less money to come shopping. what i do know, i'm in the disposable income biness a they have less disposable income. when my commodity price goes up, so did the growth ees. i don't know about everybody else, but i don't code of aggression star with my wife wants a while. prior to christmas sellers to get it was going to cook.
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you go to the store. it's crazy. these are things that the customers to my customers, that some word about. neil: constantly taking more money. what happens is the sort of get this going all over again. it cheapens the ollar. eventually it would cheapen our currency to the point that inflation does come back. >> absolutely. and really what they needto be talking about right now. okay. the killers with tax increases. okay. let's wallow would then move on. what they really needto be addressing is job growth. and by keeping this uncertainty is about not knowing what will happen with the deficit and entitlement spending -- neil: your not addressed by the job growth use of. deasy that is promising? >> and depressed. it's terrible.
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>> it depends. would survey the look at. the president was all for the inn on survey prior to the election. today it says the opposite of what the government members do. the second tell you what's happened. layoffs and firings. neil: what do you think will happen? and sorry. what do you think will happen this year? >> scary. i don't know. my employees a going to get a raise again, and a lot of companies like mine. how does this economy recover when people's cost of living is greater and their income is less could someone explain that. the president campaigned o jobs in the economy. what does this fiscal cliff do to make either one of those any better? i have yet thearhe answer that. >> you look at big, public companies whose stocks have been doing very well this new year.
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they are not nearly as worried as you are. where is the disconnect? >> the not looking at the average person, the person at's out there, the worker, the person doing all the little things, the cleaner, the food-service worker, the bakery people. the backbone of the economy and they're taking away from these people the government inaction. taking away from the salaries. looking for rises. neil: someone who has seen and met the president cannot talk to these issues directly to the president. if you could get his here now, what would you say to him, what would you recommento do? >> you know what, if i could get a restraining order lifted what i would do is sit down and talk to him about bring in small
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business owners. the problem s, no one in this the administration has ever signed the front of a paycheck they don't understand what it takes to grow jbs. and so you need to talk about, you need to free up capital. tell me what will happen so i can plan. by continuing to have me, i can't hire. neil: thank you all. unburned thing skies. happy new year. meanwhile, a we have a shrinkage issue. issue. it's getting worse.
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♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece? ♪ whatever your business challenge, dell has the technology and services to help you solve it. neil: i am assuming youave seen the picture. it is small. eight out 10 that is the case. get used to a. the payroll tax going away and ohers kicking in you are getting kicked hard and will get kicked harde

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